Housing Speculation and Entrepreneurship

81 Pages Posted: 2 Jun 2022 Last revised: 16 Aug 2023

See all articles by Xuan Tian

Xuan Tian

Tsinghua University - PBC School of Finance

Yichu Wang

Nottingham University Business School; University of Nottingham, Ningbo

Date Written: May 1, 2022


We document a speculation channel through which house market booms negatively affect entrepreneurship. To address endogeneity concerns, we exploit plausibly exogenous variation in house prices generated by staggered and unintended policy spillovers in China. We find house market speculation triggered by house booms crowds out entrepreneurship. Reduced labor supply and heighted entry costs do not appear to explain our findings. The negative effect exhibits in the OECD countries as well. Our paper complements the well-documented collateral channel by offering novel evidence on a previously under-explored adverse consequence of house market booms – their hindrance to entrepreneurship.

Keywords: Housing speculation; entrepreneurship; house purchase restriction policy

JEL Classification: L26, D84; G28; G51

Suggested Citation

Tian, Xuan and Wang, Yichu, Housing Speculation and Entrepreneurship (May 1, 2022). PBCSF-NIFR Research Paper Forthcoming, Available at SSRN: https://ssrn.com/abstract=4118058 or http://dx.doi.org/10.2139/ssrn.4118058

Xuan Tian

Tsinghua University - PBC School of Finance ( email )

No. 43, Chengfu Road
Haidian District
Beijing 100083
+86-10-62794103 (Phone)

HOME PAGE: http://xuantian.info/

Yichu Wang (Contact Author)

Nottingham University Business School ( email )

Jubilee Campus
Wollaton Road
Nottingham, NG8 1BB
United Kingdom

University of Nottingham, Ningbo ( email )

199 Taikang East Road
Ningbo, Zhejiang 315100

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